Key People

Warren G. Harding - 29th
U.S. president; was involved in Teapot Dome scandal but died before
being implicated

Calvin Coolidge - 30th
U.S. president; took office upon Harding’s death in 1923; advocated
conservative policies

Herbert Hoover - 31st
U.S. president; elected in 1928

Harding and the Election of 1920

After the end of World War I, President Woodrow
Wilson, unable to convince Republicans in the Senate to ratify
the Treaty of Versailles, stated emphatically that
the American people should settle the issue of the League
of Nations in the presidential election of 1920.
Democrats and Republicans both nominated Ohioans, James Cox on
the Democratic, pro-League platform and Senator Warren G.
Harding on the Republican ticket. Harding hoped to attract
both conservative and liberal votes by skirting the troublesome
issue of the League of Nations on a platform neither for the League
nor against it. Imprisoned labor leader Eugene V. Debs also
ran on the Socialist Party ticket and did surprisingly
well considering his imprisonment and the anticommunist sentiment
of the day.

Harding’s noncommittal stance paid off on Election Day,
as he defeated Cox by a margin of more than 7 million
popular votes and won 404 electoral
votes to Cox’s 127.
As a result of the 1920 ratification
of the Nineteenth Amendment, the election was the first
time women had voted in a national election in American history.

Pro-Business Policies

Harding’s election meant big bucks for big
business. The anti-trust gains made by Wilsonian progressives went
out the door as a new age dawned for fat-cat tycoons and good old
boys in the Republican Party. Ironically, though, many of Harding’s
pro-business policies hurt the American economy in the long run. First,
the sudden free-for-all in the market led to speculation and corruption.
Speculators began using future earnings on the stocks they
owned—money they did not even have yet—to buy new stocks, a process
known as “buying on margin.” This overspeculation,
along with widespread corruption and faulty international finances,
eventually led to the stock market crash of 1929.

Moreover, the steep Fordney-McCumber Tariff prevented
Europe from exporting goods to the United States to boost its economy
after the war. Europe was deeply in debt and needed to sell goods
to American consumers to pay off loans owed to the U.S. government. Harding’s
new tariff sparked an international tariff war that brought international
trade to a virtual standstill.

Harding’s Conservatism

Conservatism flourished under Harding as the
president distributed rewards to big business and limited benefits
for average American workers. In 1923, for
example, the Supreme Court ruled in Adkins v. Children’s
Hospital that women workers did not merit special
labor protection from the government, because they were now enfranchised and
could theoretically protect themselves. This decision effectively reversed
the previous 1908Muller v. Oregon ruling.

Meanwhile, Congress passed the Esch-Cummins Transportation Act in 1920, which
deregulated railroads, putting their control back into the hands
of plutocratic owners. In 1922, Harding and
Congress also passed the Fordney-McCumber Tariff, which
drove taxes on foreign goods up to almost 40 percent
to protect American industry. Such conservative measures, combined
with the federal government’s new willingness to break strikes using
force, caused a drastic drop in labor union membership
throughout the country.